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Building supply chain resilience through digital transformation

Building supply chain resilience

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Significant supply chain disruption was caused by COVID-19, requiring leaders to right-size their operations and embrace digital capabilities that protect supply chains against future disruptions as we enter the new reality after COVID-19. Companies from all industries are doubling down on investments in advanced technologies - from blockchain to artificial intelligence (AI), to machine learning and intelligent automation– which has proven to be the lifeblood of the organization. 

building supply chain resilience through digital transformation

Lessons learned from the pandemic

COVID-19 disruption to trade caught many off-guard, causing disruption in the supply chain. Global lockdowns brought fragile domestic, regional, and global supply chains to a grinding halt. The initial outbreak underscored how much of the global economy relies on China.

Along with increased international trade and interconnected supply chains came hyper-efficient, just in-time supply models. As COVID-19 hit, few companies had redundancy in their supply chains to weather a disruption of more than a few weeks. Of course, there are trade-offs with any business strategy. There are embedded costs to carry extra inventory, to invest in back-up supply chains, or to manufacture closer to the customer base. Changing your supply chain mantra from efficiency and low-cost country sourcing, to focus more on supply chain resilience and visibility can help future proof your supply chain and reduce complexity and uncertainty across the network.

We’ve been shown that resilience against unpredictable, dramatic events require strong business models enabled by a robust digital backbone and processes that can pivot rapidly. But how specifically to accomplish that? Although the specifics of every company challenge are different, this paper highlights the broad steps that can help businesses enhance their supply chains, regardless of their digital maturity and transformation journey.

 

Digital acceptance is the new norm

Consumers expect a personalized experience – such as product recommendations and communications – and are willing, if not downright preferring, to have that experience be digital.

Online technology allows your doctor to see, diagnose, and treat you virtually – all from home. We also see life science companies are moving away from traditional sales reps going door-to-door and using digital salesforce automation. A survey by UBS found that almost 40% of respondents in China increased online shopping in early April, higher than during the worst days of the crisis, and three-quarters of them said they planned to keep up the habit in the future.

This aligns marketing, operations and sales teams onto a single platform, alongside 24/7 training, sales forecasting, physician communications and analyzed customer data throughout the customer lifecycle.

This integration allows real-time visibility to make better decisions and can reduce operational cost.

The broad emergence of stay-at-home orders further pushed the digital trend as millions suddenly found themselves working remotely, using digital systems to collaborate and support their work, while millions of others were homeschooled using online learning technologies. In the evening, after work and school hours have ended, those same people are streaming videos.

Many of these changes in patterns are expected to continue once the pandemic is over. The vast virtual shopping, working, educating, and entertaining has many rethinking their supply chain models and how they can better leverage technologies to support digital activities.

 

Future-proof your supply chains

Good supply chain management is about two things: 1) reducing complexity, and 2) reducing uncertainty.

Implementing new technologies allow a co-existence of digital enablers and humans across the different supply chain processes and activities that can help achieve these two goals.

The excerpt was taken from KPMG article, Building supply chain resilience through digital transformation.

© 2020 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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